Analyzing Pixelworks (NASDAQ:PXLW) and Everspin Technologies (NASDAQ:MRAM)

Everspin Technologies (NASDAQ:MRAM) and Pixelworks (NASDAQ:PXLW) are both small-cap business services companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares Everspin Technologies and Pixelworks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Everspin Technologies	2.92%	3.16%	2.61%
Pixelworks	-42.77%	-72.81%	-26.40%

Valuation and Earnings

This table compares Everspin Technologies and Pixelworks”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Everspin Technologies	$58.24 million	2.24	$9.05 million	$0.37	16.35
Pixelworks	$60.70 million	0.79	-$26.18 million	($0.39)	-2.13

Everspin Technologies has higher earnings, but lower revenue than Pixelworks. Pixelworks is trading at a lower price-to-earnings ratio than Everspin Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Everspin Technologies and Pixelworks, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Everspin Technologies	0	0	2	0	3.00
Pixelworks	0	0	3	0	3.00

Everspin Technologies presently has a consensus target price of $9.00, suggesting a potential upside of 48.76%. Pixelworks has a consensus target price of $2.33, suggesting a potential upside of 181.12%. Given Pixelworks’ higher probable upside, analysts clearly believe Pixelworks is more favorable than Everspin Technologies.

Institutional & Insider Ownership

44.7% of Everspin Technologies shares are owned by institutional investors. Comparatively, 21.4% of Pixelworks shares are owned by institutional investors. 6.1% of Everspin Technologies shares are owned by insiders. Comparatively, 4.7% of Pixelworks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Everspin Technologies has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Pixelworks has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500.

Summary

Everspin Technologies beats Pixelworks on 9 of the 13 factors compared between the two stocks.

About Everspin Technologies

Everspin Technologies, Inc. engages in the manufacture and sale of magnetoresistive random access memory (MRAM) products in the United States, Japan, Hong Kong, Germany, Singapore, China, Canada, and internationally. It offers Toggle MRAM, spin-transfer torque MRAM, and tunnel magneto resistance sensor products, as well as foundry services for MRAM products. The company provides its products for applications, including industrial, medical, automotive/transportation, aerospace, and data center markets. It serves original equipment manufacturers, contract manufacturers, and original design manufacturers through a direct sales channel, and a network of representatives and distributors. Everspin Technologies, Inc. was incorporated in 2008 and is headquartered in Chandler, Arizona.

About Pixelworks

Pixelworks, Inc., together with its subsidiaries, develops and markets semiconductor and software solutions for mobile, home and enterprise, and cinema markets in the United States, Japan, China, Taiwan, Korea, and Europe. The company offers imageprocessor integrated circuits, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing within high-end display systems; visual processor integrated circuits that works with a mobile application processor; and transcoder integrated circuits which includes software that control the operations and signal processing for converting multiple bitrates, resolutions and codecs to provide bandwidth efficient video transmissions based on industry standard protocols. It also provides software and platform licensing products comprising Pixelworks Pro Software, a software that enables development and customize the look and feel of mobile products by use of various features, such as absolute color accuracy, HDR tone mapping, SDR-to-HDR conversion, and others; and TrueCut Motion Platform, content creation tool which provides the ability to dial in a motion look on a shot-by-shot basis. The company distributes its products to integrators, branded manufacturers, and branded suppliers. Pixelworks, Inc. was founded in 1997 and is based in Portland, Oregon.